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SYMPOSIUM
FALL 2015 CHINA FASHION LAW SYMPOSIUM
US & CHINA: PERSPECTIVES ON BRAND
PROTECTION AND INTELLECTUAL PROPERTY
MODERATORS
Geoffrey Sant, Special Counsel at Dorsey & Whitney LLP
Barbara Kolsun, Professor and Director of FAME at Cardozo
School of Law
PANEL 1: ISSUES IN THE U.S. FOR CHINESE BUSINESSES – PANELISTS
Cindy Yang, Partner, Schiff Hardin LLP
Jamie D. Underwood, Partner in Alston & Bird’s IP Litigation
Group
Mark Cohen, Senior Counsel, U.S. Patent and Trademark
Office
PANEL 2: ISSUES IN CHINA FOR U.S. BUSINESSES – PANELISTS
Dan Harris, Founding Partner, Harris Moure
Cedric Lam, Hong Kong Partner, Dorsey & Whitney LLP
Ling Zhao, CCPIT Patent and Trademark Law Office and
Cardozo LLM Student
Lara Miller, Associate Counsel, International
AntiCounterfeiting Coalition
Stephen Lamar, Executive Vice President, American Apparel
& Footwear Association
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BIOGRAPHIES:
Geoffrey Sant:
Geoffrey works on a broad range of commercial, corporate and
banking litigation and transactions. He is a native English speaker,
and is fluent in Mandarin Chinese, Japanese, and Spanish. Geoffrey
is an adjunct professor at Fordham Law School, where he teaches the
nation’s only class on banking litigation. His publications have been
cited by or to the United States Supreme Court, the Second Circuit
Court of Appeals, the New York Court of Appeals (New York’s
highest court), and the First Department, just to name appellate
courts.
Geoffrey’s litigation representations include defending a major
media company in a multibillion-dollar contract dispute; defending
an international bank in a billion-dollar litigation; and winning a 12.6
million USD judgment on behalf of one of his clients. In addition, he
defeated a class action litigation against one of his clients,
successfully convincing the judge to impose money sanctions against
the law firm that sued it. This remarkable result was featured in a
South China Morning Post article, “US court order brings hope for
Chinese firms.”
Geoffrey’s transactional matters include winning regulatory
approval for a new US branch of a major Chinese bank; successfully
helping a Chinese company to deregister and go dark; and
representing a major Chinese real estate company in establishing a
US subsidiary and making US acquisitions.
Geoffrey is a Director of the Chinese Business Lawyers
Association. He is a frequent commentator on legal issues for major
Asian media, including CCTV (1 billion total viewers); Phoenix
Television (hundreds of millions of viewers), People’s Daily
(millions of readers); Global Times (millions of readers); and many
others. In late 2014, the New York Court of Appeals cited to
Geoffrey and adopted his public policy arguments in deciding a
disputed point of New York law, in response to certified questions
from the Second Circuit Court of Appeals. In a 2013 law journal
article, he correctly predicted the 2014-2015 wave of bank derisking.
He is also credited with accurately predicting the 2010 wave
of investigations and securities litigation against Chinese companies
in a series of interviews in 2008 and 2009 on CCTV, Phoenix
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Television, and Global Times.
Barbara Kolsun:
Barbara Kolsun, co-director of The Fame Center, is a leading
fashion industry attorney, an adjunct professor of fashion law at
Cardozo Law, and co-editor of the seminal text on the
subject, Fashion Law – A Guide for Designers, Fashion Executives
and Attorneys (Bloomsbury, 2nd Edition, 2014). She is a consultant
to fashion companies and has taught at NYU and Fordham Law
Schools. Barbara has served as General Counsel of Kate Spade,
Stuart Weitzman and Seven for All Mankind, and was Assistant
General Counsel of Westpoint Stevens and Calvin Klein Jeans.
While in private practice, her clients included Ralph Lauren and
Tommy Hilfiger. Kolsun currently consults with fashion companies
on various issues, and was honored with lifetime achievement
awards in 2015 by both the Luxury Summit in London and the World
Trademark Forum at INTA. She has served as Chairman of the
Board of the International Anticounterfeiting Coalition and has
spoken and been published widely on fashion law around the world.
She is a consultant to fashion companies and has taught at NYU
and Fordham Law Schools.
Kolsun started the legal departments and was the first General
Counsel of Kate Spade, Stuart Weitzman and Seven for All
Mankind, and was Assistant General Counsel of Westpoint Stevens
and Calvin Klein Jeans. As outside counsel in several firms, she
represented Ralph Lauren and Tommy Hilfiger. Kolsun currently
consults with fashion companies on various issues, and was honored
with two lifetime achievement awards in 2015 by the Luxury
Summit in London and by the World Trademark Forum at INTA.
She has devoted significant time and effort to the cause of
enforcement of intellectual property serving as Chairman of the
Board of the International Anticounterfeiting Coalition and has
spoken and been published widely on fashion law around the world.
She has been the subject of stories in numerous publications,
including the New York Times, and was a consultant in intellectual
property to USAID’s Start Vietnam program in 2002 and 2004.
Kolsun clerked for the Second Circuit after her graduation
from Cardozo in 1982. She received her J.D. from Cardozo Law in
1982 and is a member of the Order of the Coif. She received her
B.A. from Sarah Lawrence College in 1971 and her experience as a
professional singer and actress continues to motivate her fierce
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efforts to protect artists’ and designers’ intellectual property rights.
Cindy Yang:
Cindy is a partner in Schiff Hardin’s Intellectual Property Group
in New York. She focuses primarily on patent, trademark and
copyright litigation; U.S. and foreign patent and trademark
prosecution; inter partes review; licensing; due diligence
investigations; opinion work; and client counseling regarding the
procurement and enforcement of intellectual property rights
worldwide. She has extensive complex multidistrict and litigation
experience, and represents a broad spectrum of U.S. and foreign
clients before courts throughout the United States.
Cindy has deep experience in prosecuting and managing complex
U.S. and foreign pharmaceutical and life sciences patent portfolios
for major universities, hospitals, companies and start-up ventures;
handling inventor remuneration, licensing, collaboration and
sale/acquisition issues related to intellectual property portfolios; and
providing freedom-to-operate and competitive landscape analyses.
She also has extensive knowledge in assisting U.S. and Asian-based
companies in the LED lighting industry with their global intellectual
property, corporate, and M&A needs, as well as assisting companies,
non-profit organizations, and professional sports teams with their
advertising and branding strategies.
Before her legal career, Cindy worked as a research associate at
the Brain Tumor Research Center at the University of California, San
Francisco. She researched the effects of seizures and ionizing
radiation therapy on the hippocampal region of the brain. She also
researched brain tissue repair modalities that promote neuronal stem
cell proliferation and differentiation, and the migration of newly
generated neurons toward damaged areas of the brain.
Jamie D. Underwood:
Jamie D. Underwood is a partner in Alston & Bird’s IP Litigation
Group, where she spearheads the firm’s Section 337 practice. Ms.
Underwood specializes in working with both complainants and
respondents to resolve investigations before the U.S. International
Trade Commission and related matters before Customs and the
Federal Circuit. She also litigates in other appellate and trial courts,
where she handles a variety of IP, antitrust, and complex commercial
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disputes. In addition, Ms. Underwood advises clients on legislative
and policy issues before Congress, federal agencies and the
Administration. Her expertise and leadership have been recognized
by CHAMBERS and IAM PATENT 1000.
An active participant in IP field, Ms. Underwood serves on the
Federal Circuit Bar Association’s Board of Governors, on IPO’s ITC
Committee, and on the ITC Trial Lawyers Association’s Executive
Committee. She has lectured on ITC practice at Georgetown
University Law School and is a regular speaker at conferences on
Section 337, IP, and international trade. Ms. Underwood has
contributed to the book entitled A Lawyer’s Guide to Section 337
Investigations Before the U.S. International Trade Commission, as
well as the “Year in Review” published in The International Lawyer.
She has also participated in multiple World Trade Organization
Ministerial Conferences as an NGO delegate.
Mark Cohen:
Mark rejoined the USPTO as Advisor to the Under Secretary and
Director and later as Senior Counsel, China in 2012, after serving as
a visiting professor at Fordham Law School (2011-2012). Prior to
that time he served in such functions as: Director, International
Intellectual Property at Microsoft Corporation; Of Counsel to Jones
Day’s Beijing office, Senior Intellectual Property Attaché at the U.S.
Embassy in Beijing (2004-2008), general counsel to a mid-sized
pharmaceutical company in Europe (1998-2000) and as a Fulbright
Professor in Eastern Europe (1993-95). In total, he has 30 years
private, public sector, in-house and academic experience in China
and transition economies, with a principle focus on technology trade
and monetizing intellectual property.
Mark has worked extensively on realigning public or corporate
resources to meet the changing demands of China’s intellectual
property environment. For example, the programs Mark established
while at the U.S. Embassy in Beijing (2004-2008) became models
for U.S. government engagement on intellectual property worldwide.
He was the first IPR Attaché posted by USPTO to handle IPR issues
in a foreign country. In addition he launched the annual
“Ambassador’s IPR Roundtable” which he co-chaired for five years,
devised IPR “toolkits”, “roadshows”, pro-bono programs, internal
and external training programs, and helped bring China into various
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multilateral fora, such as the “IPR-5”, consisting of the five largest
patent offices in the world. While at the US Embassy, and later as
co-chair of the AmCham IP Forum he also developed an innovative
series of programs on innovation in China, as well as a program on
public relations, public diplomacy and intellectual property. A
program he co-organized with the Federal Circuit Bar Association
was the largest international judicial training program in China, with
over 1300 attendees.
Mark has trained, lectured and debated Chinese IP and
competition law matters in person and in the media in English and in
Chinese. Two separate Chinese language debates he engaged in
while at the Embassy had a viewership of over 160,000,000 people
each. Currently, Mr. Cohen currently leads a China team at USPTO
consisting of 21 individuals in DC, Beijing, Shanghai and
Guangzhou, China on all aspects of USPTO’s activities in China.
One of his current projects involves setting up a China IPR Resource
Center at the USPTO to help support a more empirical analysis of
China’s IPR environment.
Among his book-length publications are Antimonopoly Law and
Practice in China (Oxford University Press 2011, with Steve Harris
et al.), He was the editor of Chinese Intellectual Property Law and
Practice (Kluwer Law International 1999). He co-edited a book on
China’s legal development in 1984 and has authored numerous
articles on such issues on Chinese IP law, alignment of corporate
resources to address IP challenges in China, international trade law
and law firm market access in China. He also manages a personal
blog www.chinaiprlaw.com.
Dan Harris:
Dan Harris is the founding member of Harris Moure, an
international law firm that focuses on representing American
companies in Asia from its offices in Seattle, Chicago, Beijing and
Qingdao. Dan writes and speaks extensively on international law,
with a focus on protecting foreign businesses in their China
operations. He is also a prolific and widely-followed blogger, writing
as the co-author of the award-winning China Law Blog.
A number of his articles on China law have been published in
leading publications, such as the Wall Street Journal, Bloomberg
Law Reports, Forbes Magazine, and the National Law Journal.
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Dan received his B.A. from Grinnell College and his J.D. magna
cum laude from Indiana University School of Law.
Cedric Lam:
Cedric has two decades of experience counseling multinationals
on IP transactions and implementing IP protection strategies in
Greater China, including a stint serving as Asia-Pacific regional legal
counsel for the Motion Picture Association of America. During the
past three years, he handled over 200 judicial, administrative and,
criminal IP proceedings in China, from recovering the English and
Chinese names of a legendary Hollywood actress in a series of
actions in the People's Court, cancelling a handful of pirate
trademark registrations for the world's largest online jewelry retailer,
to challenging wrongful judgments for trademark infringement and
unfair competition against a Fortune 500 company in the Supreme
People’s Court of China. Cedric is also known for his expertise in
and pragmatic approach to anti-counterfeiting, IP fraud and other
contentious and non-contentious IP matters.
In addition, Cedric leverages his pre-law experience as a licensed
pharmacist, government pharmaceutical policy advisor and research
scholar at a top-5 drug company and actively advises clients in the
bio-pharmaceutical, medical device and other life sciences sectors on
various patent, regulatory and compliance issues in Greater China.
He has published more than 40 IP articles and book chapters, and
speaks frequently on IP subjects.
Ling Zhao:
Ling joined CCPIT Patent and Trademark Law Office in 2000.
She is a senior trademark specialist and practitioner, with over ten
years’ working experiences in trademark prosecution, trademark
search and watch, administrative protection of trademark right,
trademark administrative litigation; legal opinion on trademark
infringement, licensing of trademark, trademark strategy.
Ling holds a Bachelor of Arts degree in English Literature from
Beijing Second Foreign Language University. She received training
of American Trademark Law and Practice in Birch, Stewart, Kolasch
& Birch LLP in April, 2008, Washington D.C., USA.
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Lara Miller:
Lara is Associate Counsel at the International AntiCounterfeiting
Coalition and runs the IACC’s online anti-counterfeiting programs.
Lara Graduated from McGill University in 2008 where she studied
psychology, behavioral neuroscience and marketing. She then went
on to complete a Corporate Communications degree at Seneca
College of Applied Arts & Design, interned in the Corporate
Partnerships department of Maple Leaf Sports & Entertainment and
managed internal operations and communications for Hariri
Pontarini Architects. Lara earned her Juris Doctor at Fordham
University School of Law where she competed and coached for
Fordham’s International Arbitration Team, served as a board
member of the Dispute Resolution Society and acted as the Student
Director of the Fashion Law Institute’s Clinic. She was also a legal
intern at the New York Kings County Supreme Court Criminal
Division, the Samuelson Glushko Intellectual Property &
Information Law Clinic, and PRADA USA Corp. Lara worked for a
boutique firm focusing on intellectual property and corporate law
matters before joining the IACC in April 2015.
Stephen Lamar:
As Executive Vice President, and as liaison to AAFA’s
Government Contracts Committee (GCC), AAFA’s Government
Relations Committee, and AAFA’s Brand Protection Council (BPC),
Steve Lamar is responsible for the design and execution of AAFA
lobbying strategies on a series of issues covering government
procurement, counterfeiting/intellectual property rights (IP),
international trade, market access, customs, labor, environment, and
product safety. In these roles, Steve also advises AAFA member
companies on legislation and regulatory policies affecting the
clothing and footwear industries.
In addition, Steve serves as the liaison to AAFA’s Legwear
Committee. Before joining the Commerce Department, Steve served
for two years as a Peace Corps Volunteer in the southern African
country of Botswana. Steve is President of the Washington
International Trade Association. He holds a Bachelor of Arts Degree
from Colgate University and a Master of Arts Degree in International
Affairs (with a concentration on African politics and international
trade) from George Washington University.
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PANEL 1: ISSUES IN THE U.S. FOR CHINESE BUSINESSES
MR. GEOFFREY SANT: I’m thrilled we have such a huge
audience and so many media entities. We have People’s Daily,
Forbes, Xinhua News Agency. And we have China Daily, a lot of big
media. And so the question is what drew so many people here
today? And I think it’s a testament to the topic and of course to the
panelists that are involved.
After all we’re competing today with Chairman Xi Jinping’s
visit and the Pope’s visit. So if you think about it, the Pope and the
leader of China at a fashion law conference, it sounds like the
beginning of a joke, right? I don’t know where it goes, but it should
be really funny.
But seriously, though, we have really hot topics today. When
people think about China and law I think they often first think about
IP issues. You have things like copyright, trademark, counterfeiting,
trade secrets.
And we’ll talk about all of that in China in our second panel,
which is going to be really exciting. But I just want to point out that
people in China have the same concerns about the U.S. when it
comes to IP issues. There’s concerns going the other way.
And that’s really what this first panel will focus on is U.S.
issues that are important to international businesses, including
Chinese businesses. And we’re going to cover a lot of interesting
topics.
The panelists I have today are really fantastic people. We
have—I’m thrilled to have these people on the panel with me. First
of all speaking will be Mark Cohen. And I’ll introduce people
before their remarks. So I’ll just introduce Mark for now.
Mark is a fellow adjunct professor at a law school that will go
nameless. He’s also at the U.S. Patent and Trademark Office. He
does an incredible amount of work with China in particular. He has
served as an advisor to the undersecretary, a director, and senior
counsel within the U.S. PTO.
And he’s going to give a short presentation in just a few minutes
about what’s happening in litigation on IP in the U.S. and China.
After he’s done we’ll introduce and have the other two panelists
speak. And then I’ll throw it open to questions.
And before Mark speaks, I just want to point out what always
happens in these conferences is that when I throw it open for
questions nobody wants to be the first one to ask a question. And so
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then suddenly at the end of the conference you have 50 people are
like, “Well you didn’t get to me.”
So don’t be the person who waits till the end. If you have a
question that you want to raise, raise it right away ‘cause we have a
lot of people here today. So with that I’ll turn it over to Mark to talk
about what’s happening today in litigation in IP in the U.S. and
China.
MR. MARK COHEN: Great. Well thank you, Geoff. It’s been
over 100 years since the U.S. and China first had patent
engagements, IP litigation, the first case was in the late 1800’s,
adjudicated by the Shanghai Consulate between a British and an
American company over infringement of a U.S. patent in China that
applied American law.
But yes, I will speak louder. It’s been over 100 years since
there’s been litigation. The environment today is probably anything
but what you would expect. For example, only about 2% of the IP
litigation in China involves a foreign element.
Americans are about 1% of that docket. We’re a small player.
We don’t even own most of the rights, the foreign community.
Utility model patents, about 1% are owned by foreigners; design
patents about 1% by foreigners.
Administrative copyright litigation, the last time they had data it
was .69% brought by foreigners. Yet we are probably the most vocal
kvetchers, complainers about the IP environment in China.
So what’s going on? At the same time Chinese now are
complaining about all the litigation brought against them in the
United States. They say they have a huge problem with patent trolls.
One Chinese official estimated 300 or so cases being brought
against Chinese companies for patent infringement in China. And
they say the system is not fair. And U.S. companies respond, well if
you infringe, we sue you. We just don’t want to sue you in China
‘cause we think we’ll lose.
Is that right? The answer is foreigners probably have a better
chance of succeeding in litigation in China than they do—than
Americans do in bringing a case to the United States. Success rates
for patent, trademark, copyright cases vary from about 70 to 80, even
90%, very high success rates.
Is it because of perhaps expertise of the judges? Well unlike the
U.S., the typical IP judge in China has a degree in IP law, whereas an
Article 3 judge in the U.S. probably has an undergraduate degree in
English or political science and a general law degree.
Okay, so knock that one out. What about deterrents? Damages
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are very low in China, very low. On the other hand, China had about
12,000 criminal IP cases last year. Ask a U.S. prosecutor how many
criminal IP cases they brought? Probably in the whole country it’s
less than 200 or 300.
New York is an exception. New York State government brings
a fair number of misdemeanor cases. So deterrents, the question of
availability of injunctions, China is more likely to give an injunction
than the United States.
China doesn’t quite have an eBay doctrine yet. Success rates, I
already mentioned. What about the difference in rights? Well
particular if we’re talking about brand protection, design, and
fashion, China has some interesting rights available that may make it
more interesting to do litigation in China than the U.S.
You can get a design patent in a week in China. You can get
applied art, which would protect fashion elements, without
registering anything. And some American companies have done it.
So why is there this discrepancy? Well one response may be
that my data is all wrong. It’s possible. It’s possible that foreigners
self-select and they don’t bring cases ‘cause they’re too afraid; they
only bring cases that they know they’re going to win.
It may be because of a lack of information. It may be because
people are just trying to exploit the system in ways that they’re most
familiar. But if you start going a little bit deeper you’ll find that at
this moment in time there are some really interesting developments
going on.
The PTO, we try to monitor every month cases where there’s a
Chinese litigant in the federal or state courts. And we’ve found cases
where American companies have lost in the U.S. and won in China
on the same basic facts, perhaps a trade secret case where the
company is located in China, the employees are located in the U.S.
We found patent cases where a U.S. company lost at the ITC
and in district court and won in China. We found a Chinese
company that brought a case in the United States on a right that it did
not have in China involving sports broadcasting and won.
So it’s not true that Chinese companies can’t win in the U.S.
even as a plaintiff. And we found one case, as another example of
perhaps a future trend, where a U.S. company lost in China and the
judgment was enforced against it in the United States.
So be careful if you think you’re going to litigate in China and it
won’t have any impact on you in the United States. This is a much
complicated, much more interesting environment than the media
suggests and that even my data suggests.
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MR. SANT: Thank you so much for that very thoughtprovoking
introduction. And I did want to mention—I neglected to
say—he is also the author of the China IP Blog, which is the blog on
China IP.
MR. COHEN: I like to think so.
MR. SANT: We also have the other leading blog in the China
field, which is the China Law Blog. Dan Harris will be speaking on
the second panel. We’re going to go now to Cindy Yang, who is a
partner at Schiff Hardin, which is one of the leading law firms in the
world and also especially in IP.
Cindy Yang not only is a partner focusing on patent, trademark,
and copyright, but she also formerly worked—this blows me away—
as a research associate at the Brain Tumor Research Center of the
University of California at San Francisco.
So she’s clearly far smarter than I am. Cindy is going to be
talking about what she says to PRC companies when they’re
interested in protecting their IP rights here in the U.S. Cindy?
MS. CINDY YANG: Good afternoon. First off, thank you
Geoffrey for putting this panel together. It’s a pleasure and an honor.
So when Geoffrey told me the topic on fashion IP and that I would
be doing more on the side of when a Chinese company comes into
the United States and has aspirations to set themselves here, as a
practitioner all these things come to my head.
So in terms of why are they here, now obviously in China they
have been stated, in terms of perhaps maybe manufacturers of
counterfeit goods or things of that nature.
But as I go travel over to China, there is a whole host of people,
designers, technologists, that are actually having a natural state of
R&D that have an interest expanding their ideas, not only into China,
but into the United States.
And as consumerism grows in China, as wealth grows in China,
as they become more sophisticated, their reach goes towards travel.
And through travel comes experience. And from experience comes
an amalgam of all sorts of ideas in which they too believe that they
should have a place in the international stage.
So this is a very ripe time to discuss these issues in terms of
when Chinese companies want to expand their wings into the United
States and to set forth here to demonstrate their creative prowess and
to also make a mark as themselves as being a leader not a follower of
ideas and innovation.
So when a Chinese company comes to me, their first and
foremost impression is what do we have here? I’ve dealt with
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counterfeit goods -across- all over China. What kind of protections
does the U.S. have?
And of course the U.S. government doesn’t necessarily have a
very welcoming—how should I say—feeling towards the fashion
industry here, as we know looking at Diane von Furstenberg with her
movements with the Council of Fashion Designers of America and
trying to get legislation to deal specifically with fashion.
The most recent one I believe is the IDPA that was put—
presented by Schumer in 2012 trying to make more of a presence of
copyright connected directly to fashion instead of being a useful
product or design.
But that of course was shot down. And so when I speak to
them, the Chinese companies that come here, I’m just like, don’t
worry. We just have to be a little bit more creative.
There is a tapestry that we can weave. It just means,
unfortunately, we can’t rely on one statute. We’re going to have to
rely on a couple. So copyright, of course, as you know, has a narrow
function in itself.
A lot of times people wonder if it actually protects a design, in
which case in the statute it indicates that it does not. And mainly
what I tell the clients is that if you’re looking towards copyright
protection, you look towards the fabric design in itself.
So Burberry comes first to mind. I used to represent Wal-Mart.
And we had dealt with specific plaid designs and had used
copyright—dealt with copyright infringement cases towards that and
looking at the histories of plaid.
So that is one aspect where people are able to use copyright
successfully in dealing with that situation. Another concept of
course is dealing with trade dress. But trade dress is a little different
here in the United States.
When you deal with product design issues, trade dress is really
given to more of the popular brands, the more well-known brands
because in the United States on product design, the design factor is
not given inherent distinctiveness.
And so you have to demonstrate some sort of presence, some
sort of knowledge with the consumers. Here in the United States that
indeed, when I look at your particular design I’m going to associate
it with your brand.
And that takes time. So sometimes trade dress, for those who
are coming into the United States, may not be the best protection.
We’ll put it in, obviously, in a complaint. But it’s usually not the
way to go.
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The other advent of course is on trademarks in itself. But
trademarks is dealing with the words and marks. So when you think
of fashion design in houses like Louis Vuitton or Gucci, even
Burberry for itself, they do have distinctive product designs and
marks that are associated.
And even as I sit here thinking also for my client, the Atlanta
Braves, on sports designs, they have their own logos which are put
onto fashion as well. So they are able, too, to use the trademark side
of those things.
But it is not a place to protect yourself with represent of the
design per say. So now lately, especially in the advent of Apple and
Samsung, the hot topic right now is obviously design patents.
So the question becomes, well how does design patents really
play a role in fashion? Because in essence it is dealing with the
ornamentation, it has a bit of a connection, if you will, to copyright.
And so there is that separation between utility, which mainly is
for utility patents here in the United States, versus the ornamentation
aspect of it. And as you’ve seen probably time again with Gucci or
Alexander Wang, for example, they have made this part and parcel
of their arsenal in terms of their protection on brands and their
designs.
There are many ways that we as practitioners try to parse out
pieces of a design to give a broad spectrum in terms of what you can
protect.
But in the advent right now of the inter partes review process,
this has become a very interesting issue because design patents, at
least from a practitioner’s standpoint, you can get it within five
months on an expedited procedural level or it will take about a year
or so if you don’t.
But mainly it almost seems in a way, not so much automatic, but
it definitely does not have the higher standards of review as one
would find in dealing with utility patents.
So in terms of the collecting all these design patents and
understanding that in fashion there is a sense—a tradition of
repetition, of inspiration, of borrowing if you will, of motifs.
So if you think about it in terms of the design patents where we
look towards the prior art, design kind of gets smaller and smaller.
So when the assertion comes in and you try to protect it in that
matter, the idea of this inter partes reexam, which was just
established through the AIA, that procedure in itself gives people the
opportunity to test your actual—your basis on design patents.
And it’s a frightening proposition. The first design patent case
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came in last year—late last year. Of course it was dealing with a
sippy cup. But that is not to say that that kind of tactic can’t be
extended over towards designs and fashions.
So I’m sure that as we sit here we will—and as time goes on we
will see many cases in terms of whether they are being brought on by
trolls, whether they’re brought by U.S. companies, or whether by
Chinese companies that have design patents and are asserting those
patents.
Don’t be surprised if they—if those patents go on to inter partes
reexam and where they stay litigation cases and within 18 months we
find out through the reasonable observer test that in essence there is
no protection.
So it’s something to bear in mind in terms of the strengths and
weaknesses of the kind of tools we have. As I mentioned, it really
depends when a client comes in whether they are a famous client or
whether they are a client that is just starting off.
These are some of the tools that I know that I’ve discussed with
them. And then more importantly, so not to determine folks in terms
of getting IP at least right away because asserting them or doing
enforcement is one way of looking at it.
But more—I look more towards brand building. I look more
towards creating alliances. So licensing becomes a factor. And
those kind of things can only really be brought up if you do pursue in
an IP strain, you do pursue in the ideas of trademark or of copyright,
or more importantly design patents.
And so you see that with a lot of companies now here in the
United States in terms of trying to deal, not only with the counterfeit
issue, but more on the—more of the knock-offs, which I think is a
much harder issue than the counterfeiting just because I think in
counterfeit there are mechanisms, at least on online.
For example, using the Digital Millennium Copyright Act in
order to stop folks, in order to take them down. You’ve also got
the—you’ve also got the police who can help you out as well. But—
MR. SANT: [Interposing] I think we’ll save some more of your
remarks for the question and answer session. You can see there’s so
much to talk about here.
MS. YANG: Yeah.
MR. SANT: But for now, let’s jump ahead to Jamie. Now
Cindy Yang, as you know, is from Schiff Hardin, which is not only a
fantastic firm but a member of the CBLA. And we also have another
wonderful firm represented, Alston & Bird, which everybody I think
knows is a leading IP firm, and they are also a member of the CBLA.
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Jamie Underwood is the head of Alston & Bird Section 33C—
337 practice—excuse me. She works before the U.S. International
Trade Commission. And she also works on customs and border
protection issues.
She’s going to focus her remarks right now on the Section 337
cases. And once she’s done I’m going to throw it up into the
audience. So as I mentioned, you should—you want to be the first
one to raise your hand because I don’t think everybody’s questions
will be reached today.
Okay, go ahead, Jamie.
MS. UNDERWOOD: Thank you. So thank you, Geoffrey.
And thank you to Cardozo for hosting this wonderful event. I’m
very happy and proud to be here among all of these panelists. I
chose to go a little bit deeper and a little bit more granular into the
ITC because there a lot of Chinese entities find themselves, mostly as
respondents of the ITC.
And I think that this particular forum is something that people
have a lot of concern about, given the sweeping remedies that are
available at the ITC. Just for a 30-second thumbnail sketch here, I’m
sure many of you in this room are 337 and ITC experts.
For those of you that are not, the ITC, the International Trade
Commission, is an administrative body in Washington, D.C. They
have a variety of responsibilities. But one of those responsibilities is
to handle Section 337 investigations.
Section 337, which is just a shortened version of where you find
it in the Code, 19 U.S.C. §1337, protects against different types of
unfair competition. And the most popular type of competition that
the ITC has been handling, certainly for the last decade, has been IP
infringement and trade secret misappropriation.
And any type of IP that that you could bring in federal district
court you can also bring at the ITC. I won’t get into the weeds.
There’s a few unique aspects that one has to prove that go beyond
the district court. But in any event it’s relatively the same.
One can bring Section 337 cases and just—with regard to just
about any type of product, which is also a reason that I thought it
might be helpful to speak a little bit about this today.
I know we have a lot of folks in the fashion industry in our
audience today. So in terms of examples that might be relevant to
your world, there have been Section 337 investigations regarding
Louis Vuitton handbags, Crocs, Teva sandals, dress shirts, particular
methods to make denim look worn, Hawaiian jewelry, you name it.
Really the sky’s the limit. So the ITC and Chinese entities have
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had sometimes a rocky relationship. I’m thinking in particular a few
years ago with the TianRui decision from the federal circuit where
Section 337, some would argue, was applied extraterritorially.
And I’m happy to talk that granularly. But what I’d like to do is
just sort of offer three basic observations with regard to Chinese
entities and their involvement or relationship with the ITC.
The first observation is that I think that there is a notion that the
ITC doesn’t treat Chinese entities very well. And in fact, when I
looked at a sample, it seems like things are going fairly well for
represented respondents.
And I don’t think that’s a surprise because whether you’re an
American company or a Chinese company, one will always do better
when one is represented by counsel.
But just as an example, I took a look at cases from 2010 to
2015. And in that time span there were about 257 respondents from
China, Taiwan, or Hong Kong. Of those 257 respondents, 92% came
out with either a straight-up win, meaning no violation was found
against them, or that the investigation was resolved through some
voluntary mechanism like settlement.
Because the settlements are confidential it’s difficult to make
judgments as to whether settlements are good or bad. But that’s—
looking at the data from a 30,000 foot level, that’s how we evaluated
it.
So that means that only 8% of those respondents either had
some sort of remedial measure lodged against it or somehow
defaulted. And I think that’s pretty great. That sort of leads me into
my second observation.
And that is Section 337 in the ITC really is an equal opportunity
forum. And the reason that I say that is because it did—if you look
at the history of the statute, it’s a trade statute.
There were some protectionist aspects many years ago. But that
is well into the past. And you don’t have to be an American
company to be a complainant. You only have to demonstrate a
domestic industry, which basically just means that you need to show
that you’ve spent some money in the United States in certain
statutorily delineated buckets.
And if you can do that, then you can avail yourselves of the very
vast protections of Section 337. Now I will note that we have not
seen too many Chinese complainants. And quite frankly, that
surprises me.
I know that Cindy and others mentioned having gone to look at
relief under a variety of statutes. And certainly the Copyright Act or
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the Patent Act is applicable at the ITC. But it really is sort of a onestop
shopping. And you can bring one suit against a variety of
companies all over the world.
And given the tremendous amount of investment in the United
States that a lot of Chinese entities have done, I would posit to you
that a lot of those companies probably already have enough
investment to have a domestic industry.
And those that don’t, many of them, with some slight
modifications to their activities, could build one in a relatively short
period of time.
So I would encourage those who think that the ITC is more onesided
to take a look at who is really availing themselves of the
protections and encourage Chinese entities to look at the ITC as at
least one possible avenue to protect their brand and their IP.
And the final observation I have is a little bit—has to do with a
little bit of proactivity. And I’m flipping it to the other side with
regard to a respondent.
And if you are a China entity who find yourself on the wrong
side of an exclusion order, there are still a lot of things that one can
do to mitigate the disruption in your U.S. market.
And I’m certainly not just picking on Chinese entities because I
think generally across the board this is an area of Section 337 that
people sort of forget about once the case is over.
And I would encourage, especially Chinese entities who have
such robust manufacturing activities that affect a variety of different
industries in the United States, to really look at post-order advocacy
as a means to ensure that any order is read as narrowly as possible,
possibly to get in some design-arounds without having to go back to
the ITC but to go through customs, and for the products that
everyone sort of agrees are not subject to the order to make sure that
they are not waylaid unnecessarily.
So food for thought.
MR. SANT: Well this is fantastic ‘cause those of you that know
IP, they’re blowing up a lot of conventional wisdom here and
popular belief in each of these presentations. So this is really
interesting.
I’m going to throw it open to questions in two seconds. But first
I just want to say that this is the U.S. side. So if you have questions
on China law or Chinese legal issues, that’ll be the second panel.
All right. So if there’s any questions, I’ll start taking those now.
Great. I will ask the first question then. Let me go to Jamie. You
kind of touched on the issue of how foreigners fare within Section
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337 cases in recent years.
So let me do a combo question for you. I’m interested in
Chinese respondents in particular. How have they done? You
mentioned that 92% win or settle. But considering that settlements
could be a loss, how many are actually winning?
And then the third component of the question is, what about
fashion-related IP in particular? Is that different or the same?
MS. UNDERWOOD: So as I mentioned, it’s really hard to tell
because settlements are closed. So we can’t say. The reason that I
did it just—and this was a simplistic sample—was simply that a
company would be able to control the outcome in some voluntary
way as opposed to having something involuntarily placed upon them.
So it is hard to say. But my notion is, just anecdotally from my
practice over the last 15 years, is that it’s fairly even. They always
say about a good settlement, if both parties are unhappy you know
it’s a good settlement.
And so I don’t think that situations with Chinese entities and
ITC settlements would be any different. It’s a great question in
terms of design patents and other soft IP, if you will.
Ninety percent of the cases of the ITC are patents. That does
include design patents. But it’s a much smaller percentage. I
actually think—I don’t have statistics at my fingertips, although I
could get them if anybody is interested.
But I tend to think that both the administrative law judges and
the commissioners are just—their mouths are watering for non-utility
patents. Okay? They’re tired of patent semi-conductor cases and
cell phone cases and things of that nature.
And so my experience has been if you have a design patent, if
you have a trademark, trade dress, things of that nature, trade secrets,
I mean I think we saw that in TianRui and other places, you find
every level really digging in, really becoming interested.
And I’ll throw this out here too. If you’re ever—if you ever
think that you want to have more attention, that somebody’s not
thinking about it very carefully, at the commission level you can
always ask for an open public hearing for public interest reasons.
And nobody does that.
And I have been told by so many commissioners they love it.
It’s been many years. I think the Kyocera case was the last one
where they did it. But they’re very enthusiastic. So I think it’s a
positive outlook.
MR. SANT: Great. All right. I see a question, so I’ll go to you,
sir.
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MALE VOICE 1: [Inaudible]. So there’s—
MR. SANT: [Interposing] Let me just repeat the question. And
so the question is whether or not we see an uptick in criminal
enforcement of IP and specifically trade secret issues. Go ahead,
Mark.
MR. COHEN: Actually your question begs a lot more questions.
You can cut me off for reasons of time. But first of all, there seems
to be this assumption in government, and to a certain degree in
industry, that trade secrets are easy cases because there’s willful
activity to misappropriate someone’s confidential information.
They’re anything but. In both the U.S. and China, even civil
cases are hard to succeed at in trade secret matters. The information
may not be commercially valuable. You may not have taken
appropriate measures, etc.
So that’s a starting point, which actually a lot of prosecutors
think they’re too complicated, too difficult to succeed. But there’s a
lot of pressure on prosecutors also to bring trade secret cases.
If you look at the numbers of criminal trade secret cases, in New
York I think last year there wasn’t one. And there is a criminal trade
secret statute in New York. On a federal level, there really aren’t
that many, perhaps several dozens.
China, we’re probably up around 70 or 80, still not a huge
number. But there is an increased interest. But they still remain
quite difficult. The interesting thing is also, if you look at it in a
cross-border perspective, Jamie just mentioned the TianRui case.
It’s actually a fascinating case because they did win their 337
case. Some people said it was an extraterritorial application.
What many people don’t know is that when the U.S.
complainants went to the Chinese Ministry that was going to acquire
the infringing product of—the product that infringed a trade secret,
they said, look, we have a U.S. litigation ongoing.
Could you not purchase this product until our litigation is over?
And the Chinese Ministry said yes. This would not happen in the
U.S., I suspect. The other thing is China trade secret litigation, or IP
litigation, is very short.
Statutory timeframes are six months for first instance litigation.
It means you if you have cross-border trade secret litigation you
really have to watch your timeframes very quickly.
Trade secrets once lost are gone forever, obviously. And I have
frequently heard people complain about the U.S. system, both civil
and criminal, because it takes too much time and the end game is
frequently an injunction and not damages.
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MR. SANT: Thank you. Yes, ma’am.
FEMALE VOICE 1: I’m interested in- - . My question is - how
much - - service - - ?
MR. SANT: Do you guys—
FEMALE VOICE 1: [Interposing] - - .
MR. SANT: —follow the question?
MS. YANG: Can you repeat that again? Are you indicating that
the painting in itself is separate even though it has the same—
FEMALE VOICE 1: [Interposing] - - .
MS. YANG: Oh, can you repeat the question again in terms
of—I just want to make sure I understand this before.
FEMALE VOICE 1: - - identical - - replicas of - - one is not. - MS.
YANG: Well I guess in that—
FEMALE VOICE 1: - - —[The exact question was inaudible on
the recording, but generally asked about how copyright law dealt
with the scenario where one work of art is based upon another.]
MS. YANG: Yeah, well thank you for repeating your questions.
So I’m going to take a shot at this because it really depends upon
Studaven’s [phonetic] contract with the Lichtenstein. So if it is—if
the permission is given to the fact that the painting is done, then the
issue becomes a derivative work issue, like how much can you go
beyond that, correct?
So it really is a contractual issue. Now if they are—if the idea is
that the paining is done and that’s what you get, then Studaven’s
rights are pretty much stopped.
And then Lichtenstein, they would actually be the ones who
would go and pursue the royalties that are related to the
incorporation of that design or the painting, if you will, into whatever
piece of clothing or bag.
So without really looking at the contract but based on that
premise, then that’s really where one is kind of stopped just by
contractual basis, the fact that they don’t have a derivative work right
that goes beyond just the fact that you can actually paint this.
FEMALE VOICE 1: - - .
MR. SANT: Okay. Well let’s see. I’ll go to the lady in the back
first. So the question was to Mark Cohen to further give details
about what he said when he mentioned that some plaintiffs in the
U.S. have lost IP cases, then gone to China and actually won that
same IP case and—where the plaintiff is a Western entity. Go ahead.
MR. COHEN: Well one—there are a number of cases that—and
obviously every case depends on the individual facts. A company
out in Long Island—this is public information—named Leviton, lost
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478 CARDOZO J. OF INT’L & COMP. LAW [Vol. 24:457
a series of 337 and domestic patent litigation cases. But it won a
design patent case in China.
Another case, to give you an idea just of how the system works,
was the TianRui case where they won in the U.S., but in essence they
got the equivalent of a preliminary injunction in China when the
Chinese Ministry said I’m not going to buy this product until this
case is resolved.
So that’s another case where they actually got a very favorable
informal remedy, if you will. There are also other trade secret cases
that I’ve heard anecdotally, non-public, where sometimes companies
have won in China and lost in the U.S. or simply because of the
length of time in U.S. proceedings the U.S. litigation has not had the
value that the China litigation had for a trade secret matter.
MR. SANT: Thank you. Further questions? Yes, sir.
MALE VOICE 2: Yes. - - at what point in the process of - market
- - design - - has been a - - . [The exact question was
inaudible on the recording, but dealt with the issue of when
companies should file for patent protection considering that the very
act of doing so may trigger imitators.]
MR. COHEN: Let me answer one part of it. Maybe I’ll leave
the second part to others. If you’re, from a business perspective,
looking at when you’re going to discover, you’re not asking the right
question.
The question is, what can you do as early as possible in your
manufacturing development stage to mitigate against risk? Trade
secret theft is one, advance word of a product. But if you’re offering
a product or displaying a product in the U.S., someone copies it but
you haven’t filed for any rights in China, maybe you haven’t gotten
the trademark in China, you’re going to launch a new brand you need
to get that trademark registered in advance of product launch in
China.
You’re dealing, in China in particular, with a highly
opportunistic market that can affect the value of your product in the
U.S. market and in China at the same time. So it’s not really at what
point do you discover it.
It’s at what point do you take steps to protect something that
you’re developing? That’s the key question from a business person’s
perspective.
MR. SANT: Great. Cindy, do you want to add to that?
MS. YANG: Yeah. I also think that on a practical level with
fashion itself, it is a fast-moving industry. It’s not semi-conductor
where someone’s going to have to make tooling designs and you can
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kind of find out.
I mean, you watch the Oscars. You watch the lovely ladies go
down. And then the next day, poof, you’ve got dresses galore in
which you can shop.
So typically in the design world it’s pretty much when you
actually hit the market, mainly online, which is why it’s important
for any fashion house, whatever Chinese or otherwise, to be—to
have good software, I guess, software ears if you will, or eyes to be
looking for products that are definitely spot-on or at least passing off
as being your product.
So I just wanted to put that out there as a more practical matter
just because of the speed in which the industry works, relatively
different from pharmaceuticals or semi-conductors.
MR. SANT: Okay. Further questions from the audience? Yes,
in the back, sir.
MALE VOICE 3: - - .
MR. SANT: So the question is, essential the gentleman says that
in his experience it seems there’s perhaps a government bias in favor
of the plaintiffs in these 337 cases, both because maybe they have a
bias generally, but also because they work more closely with the
plaintiffs in doing these things.
And the question was then, regarding your statistics what about
the cases that either don’t go forward, where they don’t respond or
they drop out or there’s a consent order early on, how does that
impact your analysis?
MS. UNDERWOOD: Sure. So I’m going to sort of break your
question down into two parts to answer the second part first as
directly as I can. The statistics that I provided specifically omitted
those types of situations where there was default or simply no one
showed up during the course of the investigation.
And the reason I did that—and I certainly agree with you that if
you were to add in all of those other respondents that the numbers
would be very different. But I would say that I don’t think that
there’s anything special about that vis-à-vis Chinese entities.
If you’ve been sued and you don’t do anything and you don’t
hire counsel, it’s not going to go well for you. So but that’s with
regard to the statistics. It’s very interesting your take on the OUII
and the ALJ.
And I would say this. You’re absolutely right that any attorney
worth his or her salt on the complainants’ side is going to meet with
OUII, the Office of Unfair Import Investigations, which is a part of
the ITC.
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It’s a party to a case that represents the public interest in a lot of
investigations. And so you can go to the OUII and vet your
complaint. But at least in my experience, maybe other people have
been luckier, but it’s more of a checklist.
So those types of meetings are not as substantive. It’s sort of do
you have the licenses attached? And do you have all of the
appendices and things of that nature? And you might be able to pick
their brain about one little thing or the other little thing.
You’re absolutely right as well that with regard to timing,
complainants have a tremendous advantage in Section 337 because
they can take a year to get ready. They can have their experts. They
can have their discovery ready to go.
And as a respondent, it really puts you back on your heels.
What I would say to that, though, again is how much of it is the
system? How much of it is where you’re from? And how much of it
is proactivity?
So if I were representing a respondent, as soon as I’m hired I’m
on the phone to OUII. And I’m going to be participating in the same
manner that the complainant is participating in an appropriate ex
parte way.
MR. COHEN: I might add—
MR. SANT: [Interposing] Sure.
MR. COHEN: -to that just another—not related to the 337
process so much but in general in terms of IP litigation and the
United States, just a little interesting data point which is that on
appeal to the Federal Circuit, the Federal Circuit acts in a slight way
to correct what might exist as local bias, what Chinese might call difang
baohuzhuyi- local protectionism.
So there’s a slightly greater chance that a foreigner will win on
appeal at the Federal Circuit if they lost below. In China, actually
the situation is the reverse. Generally foreigners fare far worse on
appeal by a margin of about 20% in IP cases than in their first
instance case.
And I think that’s because of greater political influence on the
appellate process in China. You’re just closer to the center of
gravity, whereas the Federal Circuit, our Federal Circuit has a very
conscious sense that they’re responsible nationally and
internationally for the integrity of the IP system.
So there’s a modest, very modest, bias correction to it.
MR. SANT: Thank you. I think we have time for one last
question. And then we’ll be moving on to the panel on China side
issues. Yes, ma’am in the back.
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FEMALE VOICE 2: [The exact question is inaudible on the
recording, but dealt with the impact of inter partes review upon 337
cases.].
MR. SANT: I think that’s a question for Jamie.
MS. UNDERWOOD: Sure. So there’s no direct connection.
Inter partes review, a lot of people have tried to use that to stop 337
cases. They usually do not. So the ITC has this very long, very
staunch history of no matter what we will go forward, no matter
what.
And at least in the situations I have seen, if a party comes to the
ALJ and says, hey, we want to stop the procedural schedule or slow
it down because we have a patent in the inter partes review system,
that’s not going to look—be looked upon very favorably.
MR. COHEN: I might add one other thing again from the
Chinese perspective to that. ITC cases are a bit of an IP rocket
docket in the U.S. Slightly more than a year you get your case
resolved.
First instance Chinese cases are six months. Appeals are three
months. It has happened that there have been concurrent cases in the
U.S. and China where a Chinese party brought a case involving the
same facts and party as a 337 and not only had his first instance case
decided but his appellate case decided before the ITC rendered its
decision.
So and that’s the InterDigital-Huawei case in particular. And so
if you’re looking at ways of gaming the system, it actually is a pretty
complex environment. IPR is one factor.
Another factor is if you’re a respondent, is there room to bring a
case in China? Those cases move along quite quickly.
MR. SANT: All right. Well thank you so much for the great
questions. And I’d like to thank my panelists: Mark Cohen from the
U.S. PTO; Jamie Underwood with Alston & Bird, and Cindy Yang
with Schiff Hardin. So thank you to each of our panelists.
I’ll turn it over to moderator Barbara Kolsun to lead the China
side discussion.
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PANEL 2: ISSUES IN CHINA FOR U.S. BUSINESSES
MS. BARBARA KOLSUN: Hello and welcome to the second
panel. I’m Barbara Kolsun, co-director of the FAME program here
at Cardozo and professor of fashion law here, also the co-editor of—
with Guillermo Jimenez from FIT and Brooklyn Law School who’s
here tonight, of the first Fashion Law Textbook, which we use in our
course.
I’ve spent many, many years as in-house counsel for several
fashion companies and dealt with the issue of counterfeiting with
pretty much every company that I’ve worked with. And we’re going
to focus a lot on that in this panel.
I’d like to start by asking each of our panelists to briefly
introduce themselves and tell us what he or she has done and is
doing. And then we’ll get to individual questions.
MR. STEPHEN LAMAR: Barbara, thank you. And thank you
all for being out here. And thanks to the organizers for inviting us to
this event. And I really appreciated the first panel. I very much
enjoyed your contribution.
My name is Steve Lamar. I’m the executive vice president of
the American Apparel and Footwear Association. A little bit about
myself, after college I spent some time in the Peace Corp.
And then for the last three decades or so I’ve been a public
policy advocate in Washington, D.C. I spent some time at the
Commerce Department and then have spent some time in private
practice.
Ultimately the last 17 years working with the Trade Association,
the American Apparel and Footwear Association, where I represent
the apparel and footwear industry in Washington, helping them
advocate for a variety of issues, whether it’s issues like trade,
intellectual property and so forth.
The American Apparel and Footwear Association, a little bit
about my organization, we have about 350 or so member companies
representing about 1,000 brands, famous brands. Our members make
and sell everywhere.
So we have U.S. manufacturers. We have foreign
manufacturers. We have people that import, people that export,
people that trade between other countries. So if you’re in the fashion
industry, you are related to the industry that we represent.
Our job in Washington is quite simply to tell the industry’s story
to the various policy makers, whether they’re in Congress in the
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various agencies in the executive branch. And then we help
communicate what they’re doing back to our members.
So as they’re going about their business, making and selling
clothing, shoes, fashion articles, they can do that with the knowledge
of kind of what does the policy environment look like?
And as I mentioned, we have a number of areas that we focus
on, trade, product safety, social responsibility, and intellectual
property. So this is right in our wheelhouse. So thank you for
having us.
MS. KOLSUN: Thank you. Dan?
MR. DAN HARRIS: Thank you. My name is Dan Harris. I am
a lawyer with Harris Moure. We’re a small firm based in Seattle.
And most of our work involves helping American companies go into
and figure out China.
And within that, we represent all sorts of industries or
companies from all sorts of industries, including shoe companies,
clothing companies, software companies, gaming companies.
We do work for two or three of the Hollywood studios,
consumer product companies. And all of those companies, as you
might guess, have IP issues. What’s interesting, I think, about our
practice is that most of our clients are small and medium-sized
enterprises.
And they might have anywhere from zero to let’s say five or
maybe ten in-house lawyers. And oftentimes they do not have any
lawyer who has—is terribly well-versed in international IP.
So we oftentimes have to help these companies from the very
beginning to deal with that.
MR. CEDRIC LAM: Thank you. My name is Cedric Lam. I
am a partner from the law firm Dorsey and Whitney. It’s an
international law firm with offices in 25 jurisdictions—I mean cities.
For the last 20 years I’ve been counseling multinational clients
mostly on China IP matters. And I cover everything from patents to
copyright and designs. And I spent a short stint as—serving as the
regional legal counsel for the Motion Picture Association of
America, so serving all of the Hollywood studios on anticounterfeiting
matters across Asia Pacific.
And today I guess, you know, I have a team basically
counseling clients facing IP issues when they’re doing transactions
and also enforcing the rights, protecting the rights or recovering the
rights both online and offline when they’re doing business in China.
MS. LING ZHAO: Good evening everyone. So I’m Ling Zhao.
And I’m now working as a trademark attorney at CCPIT Patent and
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Trademark Law Office in Beijing and also studying at your law
school as an LLM student. The CCPIT Patent and Trademark Law
Office is one of the largest and oldest full service intellectual
property law firms in China.
We have over 278 patent and trademark attorneys and now
whom 17 are qualified attorneys as - - . We provide consultation,
prosecution, mediation of administrative enforcements in and
litigation services relating to patent, trademark, and copyrights,
domain names, trade secrets, trade dress and other intellectual
property routine matters.
We have offices in Beijing, Shanghai, Tokyo, Munich, Hong
Kong, Guangzhou, and Shanghai. Personally I handle trademark
prosecution litigation mainly and particularly I handle trademark
search, use authorization, opposition, innovation - -cancellation,
appeals, and licenses on behalf of clients for the U.S., Japan, Korea,
and Europe before the Trademark Office, Appeal Board, Beijing
Intellectual Property Court, Beijing high courts, and the Supreme
Court.
But as an IP practitioner, I think the biggest challenge now
facing the brand owners is how to better enforce and protect their IP
rights in China. It’s not difficult to obtain the trademark rights in
China by registration. They don’t require use or - - at the - - stage.
But to enforce and to better protect it’s more complicated now
in China—
MS. KOLSUN: [Interposing] We’ll come back to that in a
second, okay?
MS. ZHAO: Okay.
MS. KOLSUN: All right.
MS. LARA MILLER: Hi there. I’m Lara Miller. I’m the
associate counsel for the International Anti-Counterfeiting Coalition.
We’re the longest-standing organization of its kind dedicated almost
entirely to combating counterfeiting here and abroad - - been around
since 1979.
Our members run the gamut from luxury apparel, footwear,
accessories to automotive, pharmaceutical, technology content and
entertainment, consumer goods, what have you. We run—we do
policy and advocacy work.
But we’re a largely operational organization. We run a number
of substantial training programs, United States, Latin America, and
internationally beyond that as well. We also have two very
aggressive online anti-counterfeiting programs which I head up.
And we do consumer awareness and other similar initiatives.
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We focus mainly on things like voluntary collaboration, which is the
basis for our—one of our online anti-counterfeiting initiatives, which
is a specific partnership with Alibaba to address the counterfeits on
their platforms.
So it’s a very unique partnership. It’s taken a lot of effort and a
lot of time. But it’s something I’m very excited to talk to you guys
about today.
MS. KOLSUN: Okay. Speaking of Alibaba, the big elephant in
the room, my favorite topic, I’d like to begin by talking about them
and spend a good part of this panel discussing counterfeiting in
China.
And I think probably most of us in the luxury world would
agree that Alibaba is definitely the big one. Steve, I know that the
AAFA has been doing some very interesting and what I would call
aggressive work on behalf of its members with respect to Alibaba.
Could you tell us a little bit about particularly your SEC USTR
work in other projects?
MR. LAMAR: Sure. Thank you. So they are the elephant in
the room, I guess. But just to provide context, it may come as news
to no one, I don’t know. But Alibaba has a counterfeit problem.
They’ve admitted this. Jack Ma said, “It’s the cancer that we
have to deal with.” They have also said they want to fix it. And on
these points we very strongly agree.
The Chinese government has done some documentation of the
scope of the problem on Taobao, finding 67% of their purchases in a
study they did about nine, ten months or so ago were counterfeit.
And that really gives some quantifiable kind of information
about what’s going on there. Our members tell us repeatedly on a
daily basis about the problems that they encounter when they find—
when they go online they’re seeing evidence of counterfeits day after
day after day.
And these are ones that are actively working to execute
takedowns and are still finding evidence of it day after day after day.
And anyone in this room can go on. You can go on right now.
On the train ride up this morning I typed in the names of about
seven or eight of our brand names, of our member brand names and
found in every instance—and these are some of the ones that have
some of the most aggressive campaigns to really go after it—I found
evidence of products that were being sold at absurdly low prices.
I mean absurdly low prices. And I’m not going to say for sure
that that’s counterfeit. But that’s just certainly is very strong
evidence that that product or those listings might be counterfeit.
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So our perspective is that this is a problem that we see our
members are reporting that—and even Alibaba agrees with it. So
starting—well we’ve been working on and off with Alibaba for about
four to five years.
And that effort really accelerated in the last 12, 13 months. We
got to a point this past April where we really felt like we weren’t
making any progress. We were kind of spinning our wheels.
And so we contacted the SEC, the Securities and Exchange
Commission. Why? Because Alibaba recently had an IPO. And so
they’re subject to the jurisdiction of the SEC. And we contacted the
U.S. trade representative.
Why? Because the USTR is the agency that monitors
international trade and the relationship with intellectual property
rights. And so when—they meet with their counterparts in the
Chinese government to identify problems and concerns and possible
remedies from a policy, from a strategic basis.
And we reported our concerns with Alibaba and our desire to fix
this. In July—again no further progress—we contacted Jack Ma
directly. The president—our president wrote a letter to Jack Ma and
laid out a request to develop a program, to develop a system that
would be fast, comprehensible, easy to use for takedowns.
Ironically, fast, comprehensible, and easy to use is the way I
would describe the ability to get counterfeits on the website. And we
want actually the people that are trying to take counterfeits off the
website to make it be fast, comprehensible, and easy to use.
And so we laid out a four-piece, a four-part concept. And I can
describe that further when we have time to—what we thought a
successful program would look like, something that would work. So
that’s kind of where we are.
MS. KOLSUN: I know that the USTR has the special 301 list.
And also I think we talked earlier about an out-of-cycle notorious
market report. Is Alibaba listed on that notorious market bad guy
list?
MR. LAMAR: Right. So to make sure everyone’s aware kind
of the reports we’re talking about—and this is again one of the
reasons why we communicate with USTR on this. So once a year
USTR publishes a report in April.
They refer to it as Special 301. That’s another, I guess another
shorthand for trade law, Special 301. And it’s a report that identifies
intellectual property rights, practices and enforcement on a country
basis once a year in April.
MS. KOLSUN: And the information that goes into that report is
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often submitted from brand owners. The various brands that I’ve
worked with always submitted—we always contributed to IACC’s
contribution to the Special 301 list.
But not—
MR. LAMAR: [Interposing] Yeah, you did to us.
MS. KOLSUN: Yeah.
MR. LAMAR: We got it from you as well. And so I was going
to say, Lara, I bet you guys send it to this as well, it’s an opportunity
for individual companies, trade associations, stake holders, anyone in
the public, any of you, to communicate your concerns about foreign
country IPR practices, whether it’s enforcement, whether the laws
are good enough, whether they’re being enforced you name it.
And U.S. government very much wants that input. It makes
them smarter. And so every year they put out a request. They will
put out a request for this report, I don’t know, probably six or seven
weeks from now.
And it will be over the course of the December/January time
period is when they’re really looking for information. They also put
out a request for a related report, which is an out-of-cycle.
That’s the term they use to mean not at the same time. So they
do one a little earlier. And in that report they list—they ask for
information on something they call “Notorious Markets.”
And notorious markets are—they define as either online or
physical markets that, again, have lots of counterfeiting problems,
trademark problems and so forth. And so the question that Barbara
was asking was, is Taobao—or I guess Alibaba—but I think Taobao
is the one I think where the most focus is—are they currently listed?
And there’s been four of these reports so far. I believe it’s four.
And they’ve been mentioned in every report. But they’re actually
listed as a notorious market in the first one.
And then they were removed as a notorious market for the
second ones where the government said we’re not going to list them
as a notorious market, but we do expect to see certain kinds of things
occur over the coming year or over the coming couple of years and
so forth.
MS. KOLSUN: And that’s obviously not based on their great
improvement, I assume.
MR. LAMAR: Yeah, I don’t know what was based on that. But
they did—and again, this is really an opportunity is—they’re looking
for comments. And again, it’s not just on Alibaba. But they are
looking for comments on any online physical market.
But they will be—this will be an opportunity for folks to weigh
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in on Alibaba as well.
MS. KOLSUN: Is it fair to say that Jack Ma has spent a
significant amount of money on lobbyists to keep him off that list?
Anybody on the panel can answer that.
MR. LAMAR: I’m not sure who has the answer to that, but. . .
MS. KOLSUN: So this is one way to deal with Alibaba. Cedric,
I asked you earlier outside if you had any opportunity to litigate with
Alibaba. And your answer was you have definitely represented
clients who have had issues with Alibaba Taobao and that you have
resolved all those issues because you know somebody there.
And you pick up the phone and it goes away. So tell us a little
more about that.
MR. LAM: Well I guess anyone who’s experienced dealing
with a problem in China knows that if you get ahold of the right
people, then you get the problem solved very quickly and efficiently.
One of our former partners is now very high up in the IP food chain
within Alibaba, and also one of my former colleagues in Hong Kong
is also working in the in-house department.
So whenever we’ve got a problem, we’ll just ring them up and
say, tell me who is responsible for this case. We will direct specific,
I guess, submissions to that person.
At the same time, we’ll follow the prescribed procedures that we
have online and follow everything that they require, basically putting
together all the formality documents, power of attorneys,
authorizations, and also the evidence that you are the right owner, all
that sort of thing.
So we’re not only trying to take the shortcut. We will follow
the books. At the same time we will try to short-circuit the process
by connecting with the right person and get it resolved ASAP
because I mean, these sort of issues happen literally every day for all
of my clients.
And one of the things that hasn’t been mentioned is that there is
a limit in terms of how many of these sort of actions you want to take
from a cost perspective.
And most of our clients, especially the ones who are managing a
lot of brands, they will be—develop a very sophisticated process in
terms of prioritizing which brands or which products they want to
sort of target as opposed to going all out because they know the
reason why they have that problem because they are having a good
product or a successful product.
You won’t get any sort of counterfeit products if your product is
not good or your name is not well-known. So basically they will set
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aside a certain budget every year and say, look, we’ll spend X dollars
for this product line.
And then they will follow through for that year. And they
renew—basically re-prioritize the different product lines every year.
And they budget it accordingly. So when we receive instructions to
takedown, it’s not just we’ll take down everything.
We’ll just do what the client thinks should be done, because
otherwise it’s not sort of the most cost-effective way to managing a
problem, which is also something good to have because the
marketing people will turn around and say look, we are doing really
well in terms of publicizing and marketing, promoting the products
in China.
MS. KOLSUN: Lara, I know the IACC has taken a—you started
to describe earlier a very kind of friendly approach—
MS. MILLER: Uh-huh.
MS. KOLSUN: —and kind of sat down across the table. Could
you tell us a little bit about that and how it’s specifically led to good
results, if so?
MS. MILLER: Absolutely. Well it’s not always friendly, but it
is very collaborative. We’ve basically tried to take Cedric’s
approach and broaden it and systematize it on a wide scale. So our
motto is we help them help us attack this counterfeiting problem.
To do that we’ve built up an in-house portal for our participants,
our brand participants, to submit very easy systematized takedown
requests. We’ve negotiated a very strong MOU with them that
expedites those takedown requests.
We have two in-house staff that speak Chinese that analyze the
listing, that analyze the counter-notices, that create that easy flow of
communication between our brands and Alibaba.
And as a result, over time we’ve built up a credibility with them
and a relationship with them that’s allowed a lot of broadening of our
program and a lot of insight into what they’re trying to do, the efforts
they’re making, and to provide guidance and help them in applying
what we’ve learned from our program on a broader level to their
entire company.
Currently the program is just for listings only the Taobao and
Tmall platforms. However we are in the process of expanding to the
Ali Protect group as well. So—
MS. KOLSUN: [Interposing] And is your experience that their
efforts are sincere?
MS. MILLER: Yes, currently. I know that there was a lot of—
you know there were a couple of road shows. They didn’t really
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have a grasp on the American market when they first started rolling
things out, when they started making some of the statements that
they made.
I think they’ve realized the damage that they did to their
credibility at the beginning of their—at this game. And they’ve
taken a lot of steps.
They’ve hired a lot of people stateside who are very aggressive
about broadening their international scope and making sure that they
do address the problems that people are bringing to their attention,
people like the AFA and people like the IACC.
And I’ve seen very strong good-faith efforts on their part. It’s a
big machine. It’s a relatively young machine. And it’s—the various
platforms are dictated by entirely disparate rules, entirely disparate
onboarding processes, different management.
And they are making a strong effort to centralize and to address
the problems.
MS. KOLSUN: So—
MS. MILLER: [Interposing] Rome was not built in a day,
though.
MS. KOLSUN: Go ahead, Dan.
MR. HARRIS: I don’t know whether Alibaba is insincere or just
not terribly competent in terms of taking stuff down. And what I
mean by that is just like everyone said, we have people in our firm
who are friend—law school friends or whatever with people at
Alibaba.
It’s very easy, as Steve—Stephen said—I think he said he
wanted something that was fast, easy, and comprehensive. I would
say it’s fast, easy, and comprehensive to get counterfeits taken down
off of Alibaba.
What’s so incredibly frustrating though, and you’ve heard a
little bit about this from I think everyone who has spoken, is how
new things constantly pop up again. So as an example, we represent
a toy company with some very famous characters.
And we have—well it’s very easy for us to get the counterfeits
taken down once we see them. But Alibaba, or Taobao, seems to
have very little capability of taking things down based on our saying,
look, this is what our client makes.
When you see wrapping paper or tennis shoes or t-shirts, our
client doesn’t make those. Those should never go up there. And I
have a very good friend who’s very high up at jd.com. And JD.com
is a big rival to Alibaba and it’s actually growing quite quickly.
And they also oftentimes write op-ed pieces in U.S. newspapers.
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And their theme, which I am starting to buy into, is why do these
things keep getting up there in the first place?
And what JD.com claims is that they do a much better job of
vetting products before they go up. And JD.com definitely does. So
why is Alibaba so bad at that? Is it because they’re not sincere? Is it
because they’re not good at it?
I don’t really know. I don’t really care. They’re just—it just
keeps on happening.
MS. MILLER: So I’d just like to provide a little insight on that
note. I think that there is a long—there’s a large—a lot of room
between insincerity and incompetence that you can fall into.
I can point to a lot of American platforms that don’t do a much
better job of screening their onboarding process. The different
Alibaba platforms have different onboarding processes. And they
lead to the ability to screen and to prevent onboarding in different
ways.
I’m not here to defend them. I’m just here to talk about what
I’ve seen. What I have seen is when we do have certain rights
holders who are participants in our program who have a problem far
outside the scope of our program, a licensing issue that went awry, a
product that should never have been made that made it onto the
market, we’ve been able to go to them.
We’ve been able to facilitate that conversation. And we’ve been
able to get bans and sweeps of certain very specific products off of
the marketplace. The issue is that it’s because we’ve developed that
kind of credibility with them.
And there’s a lot of individual determinations and individual
decisions that have to be made about a rights holder’s product to kind
of—to institute that kind of situation.
And if the rights holders or whoever represents them isn’t
putting the effort into to make sure that that process is clear-cut and
available for them to make those decisions and to take those kinds of
actions, then just saying I want it and I want it now isn’t going to
help anyone because they have a responsibility to do their business
as well.
We’ve seen—
MS. KOLSUN: [Interposing] Well I’m not sure every brand
would agree with you on that.
MS. MILLER: Yeah.
MS. KOLSUN: I think it’s—I think there’s a great deal of
despair. I mean most of us lived through the eBay years. And
certainly it was a lot easier communicating with eBay, which was
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right here in the U.S.
And we had a long fight. And then of course Tiffany lost the
case. But even having lost that case, eBay cleaned up its act quite
significantly. I mean Alibaba really is the beast that just keeps on
giving.
MR. LAMAR: Can I just make a—just a comment? I mean one
of the things too that you have to remember about Alibaba is they’re
in many ways a company that’s never existed before. I mean they’re
rewriting the rules of global commerce.
They’re rewriting the rules of China commerce. And they’re an
amazing technology company. And so with all of that comes not
only an opportunity but an obligation. And both that opportunity and
that obligation is to do the right thing, is to not be known as the
company that is associated with counterfeits.
I mean that’s what they are. I made that comment at the
beginning and I got a big laugh. That’s because everyone knows
this. I mean everyone admits—there’s like complete consensus and
agreement that this is a problem.
And why do you want your brand to be so sullied as a brand
known as the purveyor of counterfeits. And it’s going to get worse if
it doesn’t get fixed very, very soon. They are growing and they’re
expanding in a new market.
So they’re going to be, not only associated with counterfeits in
China, but associated with counterfeits all around the world. This is
a proliferation of theft. That’s what this is.
And unless it’s fixed and stopped, that’s what they’re going to
be carrying around the world. And I’ve heard some of my copanelists
talk about the special relationships. And we hear about that
too that folks have been having the ability to either execute
takedowns or solve problems.
But it’s all built around special relationships. And I get that
that’s how a lot of commerce is conducted in China. And I’m not
saying that you shouldn’t avail themselves of that. But what we need
here is a solution that doesn’t require special relationships.
It’s got to be transparent so everybody can see what’s
happening. And this is in Alibaba’s interest. They should be, they
should be proud of what they’re doing here. And they should want
there to be some kind of a transparency here.
And it should be comprehensible so you’re able to understand
what it is easily and that you’re able to execute on it easily. These
are all basic things. And this is a technology company.
And when I think of the most successful technology companies
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that we deal with, they all have these things. They’re very
transparent in what they’re trying to do. They’re very
comprehensible once you actually understand the technology. And
it’s fast.
I mean the ability to conduct business with these organizations
is lightning speed. So we should demand the same thing of this
technology company because they’re putting themselves out there
that same way.
MS. KOLSUN: So how’s that going to happen? And I want to
ask the lawyers who work in China to respond to that. I mean,
Cedric, you talked about the special relationship. But how—again, I
think Steve makes a good point.
Everybody doesn’t have that special relationship. The last
company that I worked for, it took us, Stuart Weitzman what, a year
just to get registered so that we could conduct the takedowns?
And we were a pretty big U.S.—I mean relative—you know,
$200 million U.S. brand, very well-respected. But it was a
nightmare.
MR. LAM: I think everyone has to appreciate Alibaba is a big
huge elephant. It’s growing at a speed that they probably have
difficulty managing. But I have to—I mean they are public enemy
number one to many of my clients.
But then I have to give credit to their legal department at least
they’re actually quite flexible in terms of accepting proof of your
rights. I mean I have many instances where my client has no rights
whatsoever in China in terms of registered rights.
And the only thing that they can turn to is something from the
U.S. And technically they don’t have to basically give any credit to
that. But they still, based on a U.S. right, take down something in
China which otherwise would not be enforceable in the Chinese
court or administrative tribunal.
So I think they are trying to do a good job. But it’s the volume
of cases that my contacts are telling me. They don’t have any way in
terms of prioritizing.
But a lot of the work that I think the IACC and other groups,
including the other umbrella association like the MPA and all that,
they do talk to them on a one-to-one basis trying to establish rapport
so when their members are taking action they will be given some
preference.
I know this is not ideal. But I mean when you’re talking about a
new—a relatively new organization growing at a very sort of speed
of light, then there’s some teething problems that you have to deal
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with.
And for rights owners and us, those who are assisting them in
terms of protecting the rights, we will have to sort of try and teach
them or show them what is the proper way to do it, but at the same
time trying to deliver by taking advantage of the best available route
of enforcement.
MS. KOLSUN: Ling, do you have anything to add to that?
MS. ZHAO: Yes. In China to get protection first you need to
register. It’s very important. And register early to get—
MS. KOLSUN: [Interposing] Well we know that. We know we
have to register our trademarks and we know we have to enforce our
trademarks.
MS. ZHAO: Yes. Actually - - to the view that Alibaba has been
trying hard to—you know it’s difficult for trademark owners to file
the complaints each time when they find a counterfeit piece online.
But that is the usual procedure. But in case of repeated
infringements on counterfeiters by the same infringer, there is the
possibility that Alibaba Taobao would be held liable to legal
responsibility.
Actually that is indeed a case in the year of 2012 is an important
case made by the Shanghai courts. In that case Taobao was held
liable to - - co-infringement with the actual infringer.
And that shows that in case of repeated infringements, in that
case it was some very special circumstances because the same
infringers kept posting counterfeit goods on the same line and that
the trademark owner filed a complaint to the Taobao company - many
times within the period of time of one month.
And - - issues that the Taobao should have known and could
have known that the same infringements happening online so that
they cannot take - - . So in that case the Shanghai court did hold that
the Taobao company should be liable to the infringement.
I think this shows that we do not always have to go through the
usual channels when fighting consistent infringement.
MS. KOLSUN: There is an interesting—just to call your
attention—probably many of you are aware of it—an interesting case
brought against Alibaba by Gucci. The Kering -Group actually on
behalf of the Kering brands, Gibson drafted the complaint.
And that’s actually a really interesting complaint to read in
terms of the specific kinds of details which Steve referenced in terms
of the information that we need to provide to the USTR, for example,
quite, quite detailed analysis.
I know I spoke with my co-director of FAME, Michael Kors’
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general counsel Lee Spom who’s—they’re considering bringing in
action in Europe because the litigation may be—I mean it’s a whole
forum decision.
We’ll see what happens with this case. This is obviously a very
expensive complaint. Preliminary injunction was granted. We’ll see
how it goes. But is—let me ask the lawyers on the panel, in terms of
choosing forums, should brand owners choose to go it alone? And
Kering obviously isn’t going it alone because they’ve got a group of
brands.
Is U.S. a better forum? Is Europe a better forum? Is China a
better forum?
MR. HARRIS: I don’t know that—for most of our clients, I
don’t know that any of those places are good forums because—
MS. KOLSUN: [Interposing] They cost money.
MR. HARRIS: —they cost a lot of money, right. And we’ve
talked with a number of our clients about these things. We believe
that they could win in China. They could win in Europe. They could
win in the United States.
I’ve read the Gibson Dunn complaint. I believe it talks a lot
about how Alibaba claims to be making an effort but they really have
almost nobody—and they have very, very few people in the
company that are really dealing with this issue.
I think they just recently hired their first lawyer in the United
States. And he’s very young and inexperienced. So they don’t strike
me as being all that serious about ending the problem.
They strike me as being very serious at trying to look like
they’re trying to end the problem. So yeah, maybe these are good
lawsuits. But if you’re a small toy company or even a fairly large
toy company, is it really worth bringing the lawsuit? I don’t know.
MR. LAM: I think the key determinant is to assess what rights
your client has in a particular jurisdiction. If you have no rights
that’s enforceable through the courts, for example—
MS. KOLSUN: [Interposing] Well assuming this is—of course
let’s assume we have rights.
MR. LAM: Right. Well I mean the Chinese court is—I guess
Mark has mentioned, a Chinese court can actually be a very efficient
forum if you have all your formalities and documents in place and
you have all the rights that’s there and the case is usually clear, then
a Chinese court is not a bad choice.
In fact, if you were to enforce a judgment, I mean at the end of
the day what you are looking for is some sort of injunctive relief or
maybe even damages. And if you get a U.S. district court judgment,
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I don’t know how useful that is going to be in terms of enforcing it in
China.
It in and of itself is a very complicated and difficult question.
So in most of the cases that we have worked on—civil cases—it’s
not prompted by online infringement, we would recommend clients
to take action in China.
And we have gotten very good results, as Mark reported. The
success rate for foreign litigants is actually much higher than you
would have expected. But you have to be prepared because the
litigation process in China is completely different from the U.S.
You basically have to prepare for it—it’s a sort of top-heavy
process. It’s sort of like preparing a criminal case in the U.S. You
have to have all your evidence in place before you even file a
lawsuit.
There’s no discovery effectively. So I mean a lot of brand
owners are not prepared to sort of go through this process. They
thought, wow, how—if I have to sort of spend that much in the
beginning of the process, imagine down the road the cost is going to
be.
But they are sort of misguided in - - .
MS. KOLSUN: Well let’s talk a little bit about—so we have the
time—both the domain name, the pirated domain name issue and
also the plethora of rogue websites selling counterfeits of U.S.
brands. Let’s start with domain names ‘cause I know, Cedric, you
have worked on that.
I mean I can tell you that at Stuart Weitzman, my last job, as we
were thinking and building more of a lifestyle brand and we
attempted to register Stuart Weitzman in Class 3 for fragrance in
China, of course we learned as pretty much every American brand
does or global brand does, that a Chinese registrant had gotten there
before us.
And it did not take three months to get that name back. It took
three years and probably about 75,000 bucks at least. So it’s not
for—necessarily for your clients, Dan. I mean that was a big
investment even for us because we were a small brand when we
discovered that.
And we couldn’t start shopping our name—we couldn’t start
shopping for licenses when we didn’t own that brand. I mean that’s
happened in other places besides China. Calvin Klein didn’t own its
trademark in Chile when it started licensing the brand—the name for
jeans in Chile. And it took years us for to get that name back and
lots and lots of money.
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So I mean how do you, how do you advise a not-so-rich client to
claw back its domain name?
MR. LAM: Well I guess setting up a presence in China maybe
the first step is not getting your foot into China but do it online this
day and age because you want to have your brand projected to the
Chinese public before you even get there, especially for some of the
smaller—relatively smaller like the designers and all that.
They don’t usually have a lot of capital to start with, even for
established brands in the U.S. So I guess our recommendation is
always try to get some sort of domain name which is associated with
China.
The most obvious ones are the .cn or the .com.cn or the Chinese
equivalent and all that. But most of the time they will have been
squatted. But I think the problem is actually much bigger on the
trademark front.
There are a lot of domain name squatters in China that are
targeting foreign brands, but the problem is a lot worse in the
trademark sphere ‘cause one of the ways to recover a domain name is
you have to have prior rights.
And if you don’t have a trademark registered in China, it would
be very difficult to try to recover the name other than to sort of buy it
off from the squatter. So we actually have a profession in China
which does nothing but pirating domain names and try and wait for
the rightful brand owner to come and give them a big paycheck.
MS. KOLSUN: And similarly pirates trademarks—
MR. LAM: [Interposing] Yeah.
MS. KOLSUN: —in classes that the brand—
MR. LAM: [Interposing] Yeah, I guess everyone remembers the
iPad case. Apple fought tooth and nail till the last minute. But still,
because of the first to register they had to sort of pay out big time.
Nobody knows exactly how much they paid for it, but they had
a load of cash so nobody worries about it. But I guess the idea is still
in addition to getting the trademark registered, like Ling mentioned
earlier, domain name is one thing that people kept forgetting.
And the Chinese equivalent of the name is also very important
because we got lots of instructions from clients saying file this
trademark application. This is our house mark, very important. And
then the next question we ask is do you have a Chinese name or the
Chinese equivalent of your house mark?
The answer is no. Come up with one for us.
MS. KOLSUN: But even once you have the Chinese name, once
you have the U.S.—the English version of the name, then suddenly
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there’s StuartWeitzmanOutletStores.com. Stuart—
MR. LAM: [Interposing] Right.
MS. KOLSUN: —Weitzman—
MR. LAM: [Interposing] Yeah.
MS. KOLSUN: —perfume.com. I mean there are 50 that come
out of the woodwork. And as you know, the domain name pirates
reach out to the brand and say, would you like to buy this?
MR. LAM: Right. Well I guess as long as you have one
primary site. When I said you register the domain name for your
company or your business, you don’t have to set up an all Chinese
character website.
All you have to do is basically pay some very small money to a
domain name register and then redirect all the traffic to your main
site. That is it. And then you basically have a site from which you
can operate your business.
Then, depending on budget, you can basically ignore all these
sort of noises because there’s an infinite number of combinations that
you can do in terms of domain names. So where do you draw the
line?
I basically tell the client you don’t have to worry about all these
sort of noises unless you have—you are very rich in terms of your
litigation budget.
Just stick to one. And if the English .cn is not available, do a
Chinese character because most of the time the pirate will not know
what official Chinese name you have adopted, especially for a newer
brand.
You basically create your own brand in one other way ‘cause we
have a client that only sells online. It’s one of the biggest online
retailers for a very—specialty products related to fashion.
I cannot name them because it’s very obvious who they are.
That’s a problem that they have. The Chinese equivalent of the
English name and the English name got squatted in all possible
combinations you can think of, literal, transliteration, what not.
And the only mode of service that they operate is via online. So
but the business people don’t even know. So it’s like a month before
the launch they come to me and say, “Look, we want to register
today and we want to operate the portal.”
Me, the first thing I tell them is, “Don’t do it in China or else
you’ll be sued basically front and center because all your name,
Chinese, English, or otherwise has all been registered.”
So what we ended up doing is to come up with a new Chinese
name which identified them. And they basically started doing
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business in this new Chinese name. So what I’m—I guess long story
short, basically if you want to protect your identity, your brand in
China, the very first thing you should do is to get a domain name
registered.
Trademarks nowadays take a lot shorter time to get. It used to
be like three years. Now you can get it within a year. It’s still too
long. For a domain name, you can do it in 15 minutes if you have all
the documents ready.
So in terms of recovering the mark, unless you have—you do
not have any way to operate online, this is something that you can
sort of wait and plan. But remember, in China, for .cn domain
there’s a limitation period of two years.
So if you don’t take action within two years you cannot do a
UDRP-like proceeding. You have to go through the courts. And that
costs money. And again, if you don’t have any rights in China, good
luck.
You can’t take—sort of basically take back your own name.
But I guess one of the points I want to sort of mention—I don’t want
to sort of monopolize the discussion here—is that the infringers are
getting a lot more sophisticated in China.
So oftentimes they’re—even for good platforms like JD.com
where we do—I just got a case this morning. Basically our client is a
U.S. client. They’re selling goods. It’s an accessory to iPhones and
all that.
There is a Chinese lookalike put out the stuff on JD.com. And
they tried to stop them. But to their surprise the infringer was able to
produce a trademark registration for their name. And they claim the
product is coming from Korea.
So JD.com, there’s no way that they can verify that. They just
look at the piece of paper and say look, wow, this is a brand—a
legitimate brand. So they let that product go on to this relatively
clean platform.
And our client is now scrambling, what’s going on? So
sometimes the problem is not just the platform but also Chinese
infringers or copycats are getting a lot more sophisticated.
So this is something that we have to be careful with. And I
don’t know if anyone has mentioned the New Balance case yet. This
is a sort of case that I predicted a few years ago in one of my papers.
I said foreigners—foreign brand owners keep on suing Chinese
copycats. But the time will come when the Chinese copycat will sue
the brand owners. And the New Balance case, which came out, I call
it “The hunter became the hunted” in my paper.
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And that happened in August this year. Basically New Balance
is ordered to pay 16 million U.S. dollars damages in terms of using
the Chinese name New Balance that New Balance has been using.
But this Chinese copycat actually registered their name like ten
years ahead of time and selling shoes, not necessarily athletic shoes.
But I mean mind you—so I mean if your client is not careful in terms
of entering the market by getting all the trademark registration or the
domain name registered and just walks in blind, they can be in for a
very big surprise.
MR. HARRIS: That happened with a wine or champagne
company recently as well.
MR. LAM: Yeah.
MR. HARRIS: Same thing.
MS. KOLSUN: Steve, is the AAFA doing anything with the
rogue websites?
MR. LAMAR: Yeah, well this is something that we’ve spent a
lot of time on over the years. And there was an effort to try and
address this through legislation in the United States. It got wrapped
up in the whole SOPA PIPA debacle I guess, or issue.
And that legislative effort kind of failed to go forward. In terms
of drawing attention, one of the ways that we do this is through the
notorious markets comments ‘cause the ones that we file we’ll
mention a number of websites that are out there.
And in fact, we have a request out to our members right now, if
any members are in the room and have that email from me please
respond quickly so we can get your input in ‘cause they are due in a
couple weeks.
But the—you know this is an opportunity to—we draw attention
this way. We will also have events where we will help companies.
We’ll bring in experts such as the folks here—although we
haven’t had any of you in, so maybe this will be a future
opportunity—to talk about the kinds of things you can do in terms of
protecting your intellectual property, whether it’s rogue websites or
copyright trolls or one of the other issues that come up that are either
more unique to our industry or where there is some special
application that we can talk about.
But rogue websites are a huge problem. And it shows up in a lot
of different ways. And again not just—if we were talking about
other countries I can give you some examples, but certainly beyond
China.
MS. KOLSUN: Lara, how about the IACC?
MS. MILLER: Yes, so I can add to that. Another voluntary
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collaboration that the IACC has is with all of the major payment
networks—international payment networks. So we have what is
called the “RogueBlock Program.”
We call our partnership with Alibaba the “Market Safe
Program” for reference. The RogueBlock Program is essentially a
follow the money approach. So we’ve created a similar automated
porthole that our brands can easily submit their claims into,
establishing—citing the sites, establishing the violations that have
occurred on those sites.
We legally review them. We pass them on to our payment
partners. And we facilitate terminations of the merchant accounts
behind those websites. So while the domain space is still quite a
challenge, we are trying to build up that enhancement with that as
well.
But we also try and really just get them at the choke points
essentially. We demonetize them. We dismantle their ability to
profit from these operations in the interim while everyone is working
on these other methods and taking more straightforward legal
pathways to the resolution.
It’s a nice workaround in another voluntary collaboration that’s
been—
MS. KOLSUN: [Interposing] One thing I want—
MS. MILLER: —effective - - .
MS. KOLSUN: —to point out with both—I mean it’s obvious.
But just for those of you who don’t know, both American Apparel
and Footwear Association and IACC are member organizations.
And you have to pay to be members.
So that’s—you know, for smaller business—and it’s not cheap.
So for smaller businesses like—
MR. LAMAR: [Interposing] It’s great value.
MS. KOLSUN: I know, you get great value. I agree.
MS. MILLER: It’s pretty cheap when you—
MS. KOLSUN: [Interposing] That’s why you’re on the panel.
MS. MILLER: —consider - - .
MS. KOLSUN: That’s why I called you. But for smaller
businesses like Dan’s, and I’ve worked for many of those. I mean
I’ve worked for a lot of startups, it’s not always—I mean it’s not
always the most cost-effective way to go.
I mean it’s certainly—I think one thing we’ve learned tonight is
that the kind of group approach through a trade organization and its
lobbying is definitely helpful. But I think the IACC, in addition to
dues—I used to be chairman of the board of the IACC so this is
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coming from love—but you also have to pay extra for the
Visa/MasterCard program, don’t you?
MS. MILLER: Absolutely. So our membership for small
companies is about $4,800 a year. And the RogueBlock Program is
12,500 for members which—
MS. KOLSUN: [Interposing] That’s a lot of money if you’re a
small—I mean I manage little tiny budgets. Most of the companies I
worked for, Kate Spade, Stuart Weitzman, 7 for All Mankind, when I
started we had tiny little budgets. That would have been out of my
price range.
MS. MILLER: It would have been when they started, yes. We
do try and make our programs as accessible as possible. And
honestly, we wish we had the resources to make them available to
anybody who wanted in. It would—
MS. KOLSUN: [Interposing] Dan, could you recommend—
MS. MILLER: —be wonderful.
MS. KOLSUN: —that to any of your clients? Your bigger ones,
I suppose.
MR. HARRIS: Well—
MS. KOLSUN: [Interposing] Be frank.
MR. HARRIS: —we don’t usually talk to them about that sort
of thing necessarily. But yes, I mean, a number—I know a number
of our footwear clients are in Steve’s group. And I view that almost
more as a business decision than as a legal decision.
I don’t know if it’s necessarily our role to talk about that. They
all seem to be pretty aware of those groups.
MS. KOLSUN: Okay. All right. Go ahead.
MR. LAMAR: If I can just say something, I mean I would say
that A, the role of the trade associations is beyond intellectual—well
you guys are counterfeiting. I mean you’re focused on
counterfeiting. So but—
MS. MILLER: [Interposing] Yes.
MR. LAMAR: —trade associations, they do for their members
whatever different things that they have in front of them. We, for
example, do intellectual property but also trade. So people will join
us and expect activity or ask for activity on a range of issues, public
policy issues.
MS. KOLSUN: Big—you were a big voice in the Bangladesh
fire issues. And it’s always—
MR. LAMAR: [Interposing] Bangladesh fire, a lot of the trade
policies, they just came through. So there’s a lot of stuff that goes
on. But I will just call one attention—and since we were talking
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about Alibaba—so I pulled out the Special 301 section that talked
about Alibaba and Taobao in the last three years.
And in each one of them the USTR mentions a particular focus
on small and medium enterprises and their ability to deal with
Alibaba. And so if you are a member of one of these trade
organizations or other ones, use those to communicate.
It doesn’t mean you have to rely only on them. You can
communicate directly—and this is free. This is something that you
can do as somebody that has access to regulations.gov, which is how
you submit comments.
Comments are due October 5th
. And if you’ve got a particular
interest, especially if you’re a small or medium-sized enterprise, U.S.
government really wants to know. They really, really specifically—
and in two of these three paragraphs they specifically call out, “We
would like to hear the experience of small and medium-sized
enterprises.”
And that’s free.
MS. KOLSUN: And if you look at the Kering—the Gucci
versus Alibaba complaint, it’s a very good—it kind of lays out the
facts in these kinds of cases in a very clear way if you, you know, if
you’re looking for kind of language as to how to frame these things.
All right. Before we take questions, really quickly would each
of our panelists—I was going to ask you for five things but we don’t
have enough time. Let’s say one thing U.S. businesses can do - - to
prevent counterfeits besides—we’re not counting registering
trademarks or recording those trademarks with customs. That’s off
the table.
MR. LAMAR: Be a squeaky wheel. In Washington a squeaky
wheel gets the grease. Raise your concerns. Raise it with
policymakers. Raise it with the agencies that follow this. Raise it
with your trade associations.
But make your voice known. No one can help you if they don’t
know you have a problem.
MS. KOLSUN: Dan?
MR. HARRIS: We always advise our clients to focus on the
people they know, their manufacturers, their employees. Get
contracts with them that include trade secret protection.
MS. KOLSUN: Cedric?
MR. LAM: Since we can’t talk about registration. . . Which one
piece of good news to share, I think the Chinese Trademark Office
just lowered the registration fee today by 30 bucks U.S. So with that
extra $30, try to follow up with one of my recommendations earlier
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is to get a domain name registered.
MR. HARRIS: Somebody should ask if we’re going to lower
our fees $30.
MR. LAM: Which I haven’t made a decision yet.
MS. KOLSUN: Okay.
MR. LAM: - - .
MS. KOLSUN: Ling?
MS. ZHAO: Yes, it’s good news that the registration fee is
going down. And it’s very important to get registration. And in the
meantime we keep watching the trademark stats so the local contacts.
So that means be prepared to fight - -any violations against
trademarks that are quite similar to our own brands and different
classes because we have many classes and also subclasses at this
time in China. -It’s really complicated. So when doing registration
you not only need to register our own mark and the English mark, the
Chinese mark,you also need to register - -sufficient scope of classes
of goods or services so that we can get protection properly.
And in the meantime I want to say that the trademark—the new
Trademark Act, that was effective since last May, it seems to be
more effective in offering protection to - - trademark. So for any
famous brands we can always have the rights to get recognition of - trademarks
through the Trademark Office and also - - boards - - get
better protected - - wider scope - - .
MS. KOLSUN: Thank you. Lara?
MS. MILLER: I would say never underestimate how important
tight control of your licensing and distribution chain is. Here,
abroad, have similar documents everywhere. Know where those
distribution licensing agreements are going.
Even large companies can often lose sight of that. And it really
can create a lot of problems down the line. Oh, and of course, join
us. It works.
MS. KOLSUN: All right. Questions? Oh gosh. Okay. Go
ahead.
MR. HARRIS: Oh, I’m not sure I’m really the right person
for—okay, the question was how are the IP courts—the newer IP
courts in China—how are they serving the needs of foreign
companies?
And I guess what I would say—and I think we’ve heard a bit
about this already from the people here—it is definitely possible to
win these cases in China. I remember that one of the first cases we
did in China was in Qingdao. And it was a long time ago.
And it was—I was almost embarrassed how the judge seemed to
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be bending over backwards almost to help us because we were
foreigners. Those days are over to a certain extent. But I think
that—one of our lawyers is always saying that American companies
register in China and then think that’s it.
And they do it almost perfunctorily because they’ve been told
that they need to do it. And then they view doing it as everything.
They don’t monitor. They don’t sue.
They think their chances are hopeless. I don’t think that’s true.
But I think if there’s someone on the panel who’s been involved with
a lot of cases in those courts they would definitely be better than I am
to speak on this.
MS. KOLSUN: Why don’t we talk—that’s an answer we can
probably cover outside at the reception. Go ahead.
VOICE: [Exact question is inaudible on the recording, but the
question dealt with what outside influences can impact how a
company such as Alibaba may deal with allowing possibly
counterfeit goods to appear on their platform.
MR. HARRIS: Great question.
MS. MILLER: I’ll try that one. I think that there’s a lot of
different kinds of external pressures that can influence how they
respond to their onboarding processes. But I think the largest
pressure is just going to be the voice of brands and organizations that
speak out to them and time.
Scaling a process to Alibaba size is a little bit different. And
they do take the advice of rights holders who suggest technologies.
And I’m sure they will look to other organizations to guide their
processes as well.
But it’s impossible to say how they’ll react overall.
MS. KOLSUN: I mean certainly those of you who were sparring
with eBay a decade or so plus ago recall that once they started to
sweet talk brand owners into opening stores on the eBay platform
they started working a lot harder to eliminate counterfeits from their
own platform. Joe?
MS. MILLER: That’s - - .
MALE VOICE 4: - - [The exact question is inaudible on the
recording, but the questioner described his frustration with what he
believed were onerous requirements for rights holders attempting to
take down counterfeit goods on Chinese e-commerce sites, and stated
that he had difficulty providing the kinds of documents required. The
questioner then asked for a reaction from the panelists.]
MR. LAM: I think the requirements are not particularly onerous
in terms of Tmall or Taobao, although they are a lot more Chinese
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compared to the other sites within the group. And what you
described to me is actually a lot higher in terms of the standards that
are actually required of them.
The person working on those cases within the group—actually
the same group of people—they do not have a big legal team as some
of the panelists already mentioned. They have a very small team.
And I think if you are regularly enforcing your rights—and I
mean takedown on those platforms—have that set of formality
documents ready. Basically they’re not looking for anything more
than who you are. Why do you think you have rights in a certain
name or design or copyright work or whatnot?
And the specific hyperlink to a particular infringer. That’s
pretty much all they need. They are not trying to be demanding. But
if you don’t give them these exact—or maybe if you are an agent or
service provider or a law firm or something, you need a formal
authorization letter.
And in most cases you don’t even have to have it notarized or
legalized. So it’s actually pretty simple. But if you read the English
instructions, sometimes they describe it in such a way that makes you
think it’s something more—it’s more onerous than what is in fact the
case.
So I mean if you have done it a couple times, you probably will
learn the ropes in terms of what they need. After submitting it, all
you have to do is to wait for it. I mean sometimes you have to sort of
give reminders and all that.
But in my experience, if your client’s brand or your company’s
brand is not as well-known, they will have less priority. I think
that’s the sort of working rule that they have.
Will this sort of people give pressure to me or to my boss
through one of the trade associations? Because they do care in terms
of getting reminders or complaints from big, known lobbying groups
or big companies.
But otherwise, just regular follow up and follow the rules. That
is it. But I don’t think you need to go—in terms of the quality of the
documents, I don’t think they are looking for that sort of proof.
I have never sort of gone into that sort of detail in terms of
disclosing your rights. Maybe what they’re looking for is some
China-based rights as opposed to I’m one of the biggest brands of
this industry, blah, blah, blah, these sort of generic descriptions.
MS. KOLSUN: I think we could have a whole panel just on that
topic, how to make Alibaba happy. Okay—
MS. MILLER: [Interposing] No, sorry, I just would like to add
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to that quickly if you don’t mind. We don’t even see that level of
requirement through our program. I don’t know if I
miscommunicated, but there is no—this proof that you speak of,
that’s not really an issue for us because we’ve established that.
We don’t have—we never had friends there. We made friends
there through our program. We speak with the CEO. We speak with
this young lawyer, Eric - - on a regular basis.
We meet with Michael Evans. And we’ve established a
program that doesn’t require any actual documentation when we go
in, no strong substantive requirements. Our brands are onboarded
within a day usually.
Our takedowns happen within a couple. And it’s been a really
good streamlined process. So I think maybe it’s—there seems to be
a large disparity of experience. And I think that’s probably the
biggest program—the problem that needs to be examined.
MR. LAMAR: Yeah, and just one thing to say though is our
members’ experience, one of them, is that they have a disparate
experience. Individual members will have that. And so somebody
will have a good day on Monday and a bad day on Tuesday with the
same people, exact same person they’re talking to.
In some cases it’s even sort of reestablishing identity and their
right. And then an okay day on Wednesday, and then on Thursday
the rules change. And this is what they experience. And these are
their published procedures.
And I’m hearing kind of the comments about these are the
things you have to do. And sometimes they’ll even waive them and
let you do something less than the full rigor. To me, that’s part of
the problem is that it’s a constantly, constantly shifting environment.
And for something that has got such a large scale, they’ve got to
come up with something that’s really, really simple and easy to use
and easy to use for small companies, for medium-size, for big
companies.
And if they don’t, we’re just going to—we’re going to invite
this problem to get even worse.
MR. HARRIS: Except I’m not sure that would necessarily be
good. And the reason I say that is—and Cedric keeps alluding to this
and he’s right—a lot of times you can get them to take down a lot
more than they technically should.
And by that I mean let’s say you have a company that has a
trademark in three classes in China. And somebody’s making
product in four other classes where your client does not have a
trademark.
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508 CARDOZO J. OF INT’L & COMP. LAW [Vol. 24:457
Once you’ve established a relationship with the people at
Alibaba—and I think it’s important—what you’re describing I’ve
never heard—we’ve never had to go through that sort of process.
And I think a lot of it is because our interactions with Alibaba
are done by—all in Chinese. And I think it makes things go
smoother.
And I don’t want a situation where our clients—I may not care
about other people’s clients—but I don’t want a situation where our
clients cannot get these four classes of products taken down even
though they don’t have a trademark.
And you do reach a point with Alibaba where they start going
along with what you want to do. And I’m worried that if they really
started following the rules that it might actually get—overall be a lot
tougher on people.
MS. KOLSUN: Ariel [phonetic]?
ARIEL: - - [The exact question is inaudible but it dealt with the
issue of no-use cancellation of trademarks in China].
MR. LAM: I think Ling is the expert on this. She has a paper in
the bundle that addresses this particular issue.
MS. ZHAO: Okay. So according to the Chinese - -Trademark
Act so effective as of May for trademark you have been using the
mark in the market by production? Yes, by production it’s kind of
used—we can use to defend against no-use cancellation.
So to defend no-use cancellation, production is enough. You
can submit the evidence to the trademark office. And they will
recognize that. And you will have your mark valid. Yes.
Or yes, it’s very important to register mark in a wider scope. In
the meantime if someone else registered your mark and used the
registration to attack your mark they are according to the law when
you want to claim damages based up on a registration you need to
prove that - - has been used in the past three years.
Otherwise you can use no-use cancelation to defend against
infringements. They cannot get damages. So that’s one thing. And
if they just register and they haven’t been used for more - - you can
also apply the cancellation against - - .
MS. KOLSUN: Two more questions?
VOICE: [The exact questions were inaudible, but the questioner
raised two issues: first, whether there is a bias in Chinese
government bodies against foreign companies with IP rights, and
second, whether it made more sense to fight infringement in China
through actions in the U.S., China, or in Hong Kong.]
MR. LAM: Well if I were to give you a definite answer to either
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2016] FALL 2015 CHINESE FASHION LAW SYMPOSIUM 509
question it would not be the right answers. The first question,
whether there’s a bias, it depends on the body, the government
bodies. You’re looking at Chinese government bodies, I mean.
We have seen Chinese trademark examiners, for example, a
little tougher I guess if the application is filed by a foreign applicant.
Not the case in terms of patents. As to Chinese courts, it depends on
the locality.
So we can’t sort of generalize in terms of whether there are sort
of local preferences. But definitely it exists. But it—depending on
the context. And I think you can talk to any of the old China hands
like Mark and probably—
MALE VOICE: [Interposing] Yeah Mark.
MALE VOICE: Mark with all the statistics.
MR. LAM: Yeah. But in the second question it’s—whether
you—it’s good to go through a firm in Hong Kong. Take our firm as
example. We have offices in China as well, say Shanghai. But a lot
of the IP function, it’s coordinated through Hong Kong, most of it.
There is just a strategic decision in terms of where you put
things. If you remember Google, they moved all their Chinese
services to Hong Kong. There’s a reason why. If you don’t want
your client information to be able to sort be examined in detail by the
Chinese CIA, then there’s a reason for operating out of Hong Kong.
But there’s a limitation in terms of what foreign firms can do,
including Hong Kong firms. Is that—we are like the English
solicitor firms. There’s a limit in terms of what we can do in terms
of standing on our feet in Chinese court.
It’s something that China has not opened to foreign service
providers as yet. So you basically will be sort of working with two
sets of service providers. But then depending on their skills and
experience, the total cost may not be any higher, and definitely the
results are—there are differences.
I mean I’m not trying to sort of say one is better than the other.
But it’s depending on the issue that you have. For example, I would
definitely say in some cases it’s better off if there’s limited value for
firms like us, the international firms and non-Chinese firms, to get
involved because the value added is very low.
In fact, many of our clients, I will just tell them to go straight to
some of these like CCPT team which is sort of a historical
powerhouse in terms of prosecution of trademarks for example when
there is very little value that we can add, i.e. it’s a straightforward
application; there’s no chance of getting opposition and whatnot.
But I hope I answered your questions.
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510 CARDOZO J. OF INT’L & COMP. LAW [Vol. 24:457
MS. KOLSUN: One last question before we all go off to the
reception.
FEMALE VOICE: - - [The exact question was inaudible, but
dealt with the issue of the ownership of website names in China and
pirated domain names].
MR. LAM: Well registering .cn domain name is becoming a lot
easier these days. When it first became available you can only do it
through a local agent. Now you can do it by paying any of the sort
of GoDaddy or like—not trying to do any sort of ads here. Sorry.
But it’s very easy. It’s less than the cost of a Starbucks coffee.
And you can—what I’m saying is that if your company’s name
or brand has already been pirated it takes a long time to recover it, if
at all possible, because if you don’t have any sort of prior trademark
registration or other rights to support your claim there’s no chance
that you’ll be able to sort of reclaim dominion short of buying it off
from the pirates.
So instead of trying to sink your money into that and if you want
to get into the market and make yourself known, register an
alternative name and try to market through that particular one, either
as an English character name.
You can call it brand China, something, .cn or what not or come
up with a Chinese character equivalent, which is your official
Chinese name and use that. And as I said, you don’t have to create
an all-Chinese website.
All you have to do is to redirect it to your main site. And when
you have time and the budget to work on the Chinese site, do it. But
at least you have a foothold. Things are getting very sort of
globalized these days.
And if you don’t get your name out there fast in China—it’s a
very fast-moving market—you will lose your name in no time. We
have worked with brands which are 100 years old. And because they
moved too slow the name got squatted and basically they lost a
complete market, not only in terms of the core products but all the
sort of ancillary products that goes along with it.
They lost the opportunity for licensing use of those, which they
are doing for the rest of the world. So that’s why I’m saying move
fast. And because registration is not a recommendation we can give,
I still would recommend that you do the domain name ASAP.
MS. KOLSUN: Okay, thank you to our wonderful panelists.
We have a reception outside. So if you have questions that we didn’t
answer, please feel free to grab them there.
[Everyone exchanging thanks.]
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